Can Louisville's strict Code of Ethics be enforced against the LRC?
No. And this is a significant problem.

For more than two decades, the Louisville Code of Ethics has served us well. It gives guidance to public officials, it deters unethical behavior, and when public officials act unethically, they can be called to account.

The unelected members of the Louisville Revitalization Commission are exempt from the Code of Ethics, because the LRC is a state-governed entity and is not governed by municipal law.

To illustrate the problems of an unelected LRC conducting urban-renewal activities outside an enforceable Louisville Code of Ethics, it's useful to compare the ethics rules applicable to (a) Louisville officials, and (b) LRC members.

What Louisville officials must comply with. The City of Louisville has some of the most potent ethics rules in the State of Colorado. The City actually has two ethics codes, one in the Louisville Municipal Code and another one in the City Charter. The City Charter ethics code eliminated loopholes in the municipal ethics code.

Both ethics codes impose strict guidelines on what public officials can and cannot ethically do. For example, they prohibit conflicts of interests, and define such prohibited "interests" broadly to include any "pecuniary, property, or commercial benefit, or any other benefit the primary significance of which is economic gain or the avoidance of economic loss."  Under the ethics codes, if a relative—which is broadly defined—of a City official has a prohibited interest, then the City official is deemed to have the same prohibited interest. If, for example, a City Council member had a prohibited interest, she would be barred from (a) participating in official actions affecting that interest, (b) appearing before the Council on a matter relating to that interest, or (c) attempting to influence publicly or privately any public official regarding that interest.

There is a robust enforcement mechanism. First, City officials must self-disclose their interest, decline to participate in any discussion or decision regarding the prohibited interest, and leave the room where the discussion or decision is occurring. Second, whenever anyone—Council member, member of an advisory body, resident or non-resident of Louisville—believes that a public official has violated the ethics codes, she may file an ethics complaint. The filing of the ethics complaint triggers a criminal investigation by a special prosecutor within strict time limits. There are penalties for violating either ethics code.

The LRC has nothing resembling the Louisville Code of Ethics. The LRC is a state-authorized governmental entity created by the City but, ironically, its ethical conduct is not governed by the Louisville Home Rule Charter or the Louisville Municipal Code. It is governed by state law. It is exempt from the City's two ethics codes. As city attorney and LRC attorney Sam Light told the LRC on March 10, 2005, the LRC "was not created by or pursuant to the Charter, and is not an advisory board to City Council"; it is a quasi-public corporation "organized pursuant to applicable state law and . . . exercises its own statutory powers."

A state law governs conflicts of interest of LRC members. Under that law, an LRC member who has a conflict of interest can still vote on a measure affecting his or her personal financial interest if "the Commission determines that, in the light of such personal interest, the participation of such member in any such act would not be contrary to the public interest." More remarkable yet is that under this language the conflicted LRC member would be entitled to vote on whether her voting on the measure would be "contrary to the public interest." In sharp contrast, under the City's ethics codes, any public official who has a conflict of interest is never entitled to vote, and no public body can give him a right to vote.

After citizens complained that the LRC was not required to comply with the City's ethics code, the LRC in early 2007 took an interesting step: it amended its bylaws. The bylaws now provide:

The members, officers and employees of the Commission shall also comply with the Code of Ethics set forth as Sections 5-6 through 5-17 of the City of Louisville Home Rule Charter. For purposes of application of such Code of Ethics only, the [LRC] shall be considered a "public body" and a member of the [LRC] shall be considered a "public body member."

There are three reasons why the LRC's adoption of the Code of Ethics has no effect whatsoever for citizens:

1. The LRC is not a "public body" and the LRC commissioners are not "public body members" under the Code of Ethics. The Louisville Code of Ethics applies to all "public bodies" in the City and its members. The Code defines a public body as "any board or commission." The Louisville Home Rule Charter defines a "board or commission" as any board or commission "established by or pursuant to Section 10-1" of the Charter. Section 10-1 of the Charter provides that the Council may "by ordinance" establish any board or commission.

By contrast, the history of the LRC demonstrates quite clearly it is not a Charter-created board or commission. Created in 1971 as the "Louisville Urban Renewal Authority," the LRC predates the 2001 adoption of the Charter by 30 years. More importantly, the document that created the LRC was a resolution approved under the state Urban Renewal Law, not an ordinance passed under Louisville law.

There is nothing preventing the LRC, or IBM or even the Boy Scouts from adopting into its bylaws the Louisville Code of Ethics. You could adopt it as part of your family's bylaws. But what the LRC, IBM and your family cannot do is to subject anyone to criminal or other municipal liability for the violation of those bylaws.

2. It's a bylaw, not a law. Here is the definition of "bylaws": "the written rules and regulations framed and accepted by the members, shareholders etc while incorporating a corporation, association, partnership or other association of persons, containing the mode of management of the institution." Unlike a bylaw, a "law" is a "body of rules of action or conduct prescribed by controlling authority, and having binding legal force." It is a rule that "must be obeyed and followed by citizens subject to sanctions or legal consequences." (Black's Law Dictionary 795 (5th ed. 1981).)

It is easy to see, then, that an LRC member's violation of the Louisville Code of Ethics is not actually a violation of the Louisville Code of Ethics, but a violation of the LRC's bylaws. What are the consequences of an LRC bylaw violation? The bylaws don't say.

Whatever those consequences may be, one thing is certain: They are not the same consequences as they would be if a Council member violated the Code of Ethics. Such a violation is a misdemeanor subject to criminal prosecution, conviction and criminal punishment, including fine and imprisonment. And unethical misconduct by a city official is subject to an injunction brought by the City Prosecutor.

None of this is true for a bylaw violation. There is no prosecutor, since prosecutors don't enforce corporate or other "bylaws." There is no judge, since judges don't enforce corporate or other "bylaws."

A word about "cynicism." At the CCTV 54 public forum, one of the opponents of 2A objected to the analysis of the LRC's adoption into its bylaws of the Code of Ethics, arguing that this analysis assumed LRC members would commit wrongdoing and implying that we citizens should not assume a legally enforceable ethics code was needed to govern LRC members. The LRC obviously disagreed: it thought an ethics code was needed, or it wouldn't have tried—albeit ineffectively—to adopt an ethics code. And if the LRC thought its members would not need guidance, it wouldn't have adopted bylaws. James Madison wrote, "If angels were to govern men, neither external nor internal controls on government would be necessary." As Madison makes clear, and as even our current state of affairs in the nation so clearly demonstrates, this notion that we should simply "trust" the government to do the right thing and to spend our money wisely simply ignores or underappreciates our American democratic history and traditions.

3. Can a citizen enforce a bylaw against the LRC? For its enforcement, the Louisville Code of Ethics depends on a person willing to file an ethics complaint—under penalty of perjury. In the last 10 years, two ethics complaints have been filed against city officials (two Council members), both times by citizens. We are aware of no occasion when a city official has filed an ethics complaint against another city official. As the Daily Camera's editorial endorsing a "Yes" vote on 2A points out, the reason is apparent: no city official wants to alienate another city official by filing an ethics complaint against him or her.

If you believed an LRC member committed a violation of the Louisville Code of Ethics, could you file an ethics complaint against him or her? No, because as we noted above, bylaws are enforced by members of the organizations that adopted them, not by outsiders. For example, could you enforce IBM's bylaws? Citizens cannot enforce the ethics code against the LRC. This was the very conclusion of the Camera editorial: "2A's advocates note correctly that citizens lack standing to file ethics complaints."

The LRC's attempt to impose ethics upon its members does not begin to offer the kind of protection from ethics violations a "Yes" on 2A would provide.
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